There is an interesting opinion piece in today's Wall Street Journal by Richard Epstein on addressing malpractice lawsuits as part of health care reform. Epstein is a University of Chicago law professor, a senior fellow at the Hoover Institution, and a visiting professor at Law School.
AWB, along with the Washington State Medical Association, has pushed for medical malpractice lawsuit abuse reform as part of a comprehensive tort or lawsuit abuse reform legislative package. The American Medical Association also is pushing similar reforms and during its annual convention asked President Obama to support medical malpractice reforms. The President refused.
Epstein writes:
A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were "exorbitant." And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don't include damage awards set at improper levels.
More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. -- for about 10% the total cost. In other words, our costly system doesn't seem to do much to deter malpractice. On medical malpractice at least, Canada does better than we do.
The U.S. cannot ignore serious reform. To be sure, medical malpractice premiums constitute well under 1% of the total U.S. health-care bill. But defensive medicine adds perhaps as much as 10%. High malpractice costs can shut down clinics that serve vulnerable populations, leading to more patient harm than the occasional case of malpractice.
The solutions:
The best reform would be to allow physicians, hospitals and patients to contract out of the liability mess by letting the parties reject state-imposed malpractice rules. They could, for example, choose to arbitrate, to waive jury trials, or to limit damage recovery. Stiff competition and the need to maintain reputation should keep medical providers in line in such a system. Market-based solutions that make the private sector more responsive should in turn undermine the case for moving head-first into a government-run health-care system with vast, unintended inefficiencies of its own.
Amen!
Don C. Brunell, President (DonB@awb.org) (Cartoon courtesy of The Wall Street Journal)
